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How American Renal Associates’ Financial Performance Is Trending

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Top line

In fiscal 2017, American Renal Associates Holdings (ARA) generated total revenues of $745.1 million compared with $749.7 million in fiscal 2016.

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Operating expenses

American Renal Associates Holdings incurred patient care costs of $482.4 million in fiscal 2017 compared with $452.4 million in fiscal 2016. This increase was primarily due to an increase in the number of treatments.

The general and administrative expenses incurred by the company decreased from $127.6 million in fiscal 2016 to $102.5 million in fiscal 2017. This 19.6% decrease was due to a decrease of $22.2 million in stock compensation expenses. Depreciation and amortization charges were $37.6 million in fiscal 2017 compared with $33.8 million in fiscal 2016. Legal expenses incurred by the company grew from $6.7 million in fiscal 2016 to $15.2 million in fiscal 2017.

The total operating expenses incurred by American Renal Associates Holdings increased from $622.9 million in fiscal 2016 to $638.6 million in fiscal 2017.

Bottom line

American Renal Associates Holdings incurred interest expenses of $29.2 million in fiscal 2017 compared with $35.9 million in fiscal 2016. While the company had enjoyed a tax benefit of $753 thousand in fiscal 2016, it incurred tax expenses of $8.1 million in fiscal 2017.

The net loss incurred by American Renal Associates Holdings decreased marginally from $7.7 million in fiscal 2016 to $7.4 million in fiscal 2017. This translated into a net loss per share at $0.24 in fiscal 2017 compared with $0.28 in fiscal 2016.

Cash flows

American Renal Associates Holdings generated $128.5 million in operating cash flows in fiscal 2017 compared with $172.2 million in fiscal 2016. This decrease was due to a decrease in net income partly offset by a decrease in stock compensation expense.

The company used up $122.5 million in fiscal 2017 compared with $96.3 million in fiscal 2016. This 27% increase was due to American Renal Associates’ purchases of noncontrolling interests in existing clinics of $29.5 million in fiscal 2017.

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